• Indian Rupee (INR) traces domestic equity market higher
  • Covid crises deepens with 18 million cases
  • US Dollar (USD) rises versus major peers after strong GDP data
  • US Federal Reserve kept rates on hold

The US Dollar Indian Rupee (USD/INR) exchange rate is trading lower for a sixth straight session on Wednesday. The pair settled -0.13% lower on Wednesday at 74.49. At 14:45 UTC, USD/INR trades -0.5% at 74.11.

The covid crisis in India continues to escalate, crossing yet another grim milestone. India has now recorded 18 million covid cases with a record 379,257 new daily infections over the past 24 hours.

Despite the dire situation the Rupee is rising, tracing the domestic equity market higher. Indian shares gain for a fourth straight day, climbing to the highest level since mid-March on the back of upbeat earnings reports.

THE Nifty 50 closed 1.1% higher and the Sensex settled up 1.19%.

The US Dollar is falling versus the Rupee. However, it is advancing versus its major peers on Thursday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.08% at the time of writing at 90.68. Even so, it continues to trade around 9 week lows.

The US Dollar declined sharply on Wednesday after the US Federal Reserve kept interest rates on hold and stuck to its dovish stance. Whilst the US central bank upgraded its outlook for the US economy, the Fed Chair Jerome Powell also reiterated that the Fed would remain accommodative. Powell said that it was too early to talk about tapering support to the US economy.

US GDP data showed that the US economy grew at a faster rate in the first three months of the year than at the end of last year. The Q1 US GDP printed at 6.4% on an annualized basis, well ahead of the 4.3% recorded in Q4 2020 and beating the 6.1% forecast.

US jobless claims printed at 533k, the lowest level since the start of the pandemic. The data indicates that the US economic recovery is well on track.